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Protecting Your Property

Individual, LLC, or trust: how landlords hold property

A plain-language look at three common ways landlords hold rental property in Illinois, and what to ask a professional before deciding.

This page is educational, not legal or tax advice. How you should hold a specific property depends on your finances, goals, and state law. Talk to a real estate attorney and/or accountant before making this decision — we're happy to point you to ones we trust if you don't already have one.

Option 1

Owning the property in your own name

This is the simplest and most common way to start out, especially for a first rental property.

What it generally means

The property title is in your personal name, the same as your primary home. No separate legal entity is created.

What landlords often weigh

  • Simplest and least expensive to set up
  • Financing is often easier to get as an individual
  • Your personal assets may be more exposed if the property is sued
  • Many landlords use higher liability limits on their insurance to help offset this

Option 2

Holding the property in an LLC

An LLC (limited liability company) is a separate legal entity that can own property on your behalf.

What it generally means

The LLC, not you personally, holds title to the property. You own the LLC, which owns the building.

What landlords often weigh

  • Can help separate personal assets from a property-related lawsuit
  • Involves setup costs, annual filings, and ongoing paperwork
  • Financing as an LLC can be more complex or require a commercial loan
  • Often paired with landlord insurance rather than replacing it

Option 3

Holding the property in a trust

A trust is a legal arrangement often used for estate planning and privacy, alongside or instead of an LLC.

What it generally means

A trustee holds legal title to the property for the benefit of whoever you name — often used to plan for how property passes to family.

What landlords often weigh

  • Can help property pass to heirs without going through probate
  • Can offer some privacy, since the trust's name appears on public records instead of yours
  • Doesn't always provide the same liability protection as an LLC on its own
  • Often set up alongside an attorney as part of broader estate planning

Either way

Your insurance still matters

However you hold the property — personally, through an LLC, or in a trust — it still needs a landlord insurance policy suited to how the title is held. If you form an LLC or trust after buying, let us know so we can make sure the policy reflects it correctly.

Talk to us about your policy

Not sure which setup is right for you?

We can't give legal advice, but we can help make sure your insurance keeps up with whatever you decide.

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Chicago Landlord Insurance is a project of Northwest Chicago Insurance Group, our full-service sister agency at 6733 W Belmont Ave in Dunning, Chicago.